INFLATION has risen yet again meaning millions of British families face a prize squeeze at Christmas, official stats revealed today.
The main measure of consumer inflation stood at a six-year high of 3.1 per cent in November, according to the Office for National Statistics.
Bank of England boss Mark Carney will now have to write a letter to the Chancellor explaining why inflation is so much higher than the 2 per cent target.
The soaring Consumer Price Index (CPI) mean that pay growth is still lagging behind prices in the shops.
Rising inflation was blamed on a hike in the cost of food, housing and transport.
Inflation has remained high since last year’s Brexit vote because the fall in the value of the pound makes imported goods more expensive.
The Government’s preferred CPIH measure, which reflect housing costs better, rose by 2.8 per cent.
And the outdated RPI, still used by some firms to calculate price changes, stood at 3.9 per cent.
A separate set of data released today showed that UK house prices have risen by 4.5 per cent over the past year – making the average home cost £224,000.
Although prices in London are still higher than any other region, standing at more than £480,000, they are growing slower than elsewhere and have recently started to fall.
Last month, the Bank of England raised interest rates for the first time in nearly a decade in a bid to curb inflation.
The Bank will announce this week whether or not it intends to hike interest again.
Peter Dowd, shadow chief secretary to the Treasury, said: “There will be millions of working families who will be struggling this Christmas already as a direct result of Government policies such as the benefits freeze and the public sector pay cap.
“This is a further reminder of just how bad this double whammy of rising prices and Tory austerity policies will be this month for them.”
Lib Dem leader Vince Cable added: “The price of Christmas has gone up for millions of families – and that is the fault of the Government.”
Minister vows to help Sun readers squeezed by price rise
As a Minister at the Treasury, I hear regularly from families up and down the country asking about the action we are taking to support them in the face of the challenges to family budgets.
As prices rise I recognise this brings additional pressure and today we get the latest inflation figures showing how the cost of the things we buy is changing.
These pressures are precisely why we took a number of key steps to help Sun readers with the cost of living in the recent Budget.
For workers on the National Living Wage, we are increasing their pay well above inflation to £7.83 an hour. That means if you are working full-time on the National Living Wage you will earn £600 more next year.
And we are once again increasing the amount of money you can earn before you start paying any income tax. It also means if you pay the basic rate of tax, you’ll typically be £1,000 better off compared to 2010.
If you are looking to get on the housing ladder for the first time we are abolishing Stamp Duty completely for homes worth less than £300,000, and reducing it for those below £500,000. That means the average first-time buyer will save £1,700.
When you put fuel in your car you’ll find that we have frozen fuel duty for the eighth year in a row, meaning that since 2010 the average driver is £850 better off.
If you go to the pub in the run-up to Christmas, the price of your pint, glass of wine or shot will benefit from our freeze in alcohol duty.
And we are building this immediate support on strong foundations. Our country has created over 3million more jobs over the last seven years and unemployment is at its lowest level in over 40 years.
And we have done this while steadily reducing the deficit, so that we keep our economy stable and avoid passing on a heavy burden of debt to future generations.
Along with all of this we are also investing for the long term so that we develop a country that is fit for the future. And that means investing in the right areas.
So we have announced that we will spend £30billion on boosting the amount we produce as a nation, investing in new technologies like artificial intelligence and building the housing, roads and railways that we need.
We are also investing more in apprenticeships and training – focusing on the core skills and knowledge our workforce requires for us to seize the new opportunities that await in the years ahead.
This Government will continue to work hard to deliver for you. We are taking immediate steps through firm positive action on the cost of living and in the longer term through investing in our future, whilst continuing to bear down responsibly on our debts.
Only this way will we ensure a bright and prosperous future for us all.